- FTX will begin making payments in January, starting with claims of $50,000 or less.
- The update has generated huge interest in the defunct exchange’s FTT token.
Bankrupt exchange FTX will start paying out on January 3rd. Crypto exchanges Bitgo and Kraken will handle the disbursed funds and could take 60 days to finalize.
This implied that the bulk of the repayment could end in the first quarter of 2025.
However, the first phase of payment will cover the ‘Convenience Class’ for those with claims of $50,000 or less, depending on your reorganization plan. Part of FTX statement read,
“The Initial Distribution is limited to the Convenience Classes of the Plan. Separate registration and payment dates for other classes of claims will be announced in due course.”
Next steps for FTX creditors
John J. Ray III, CEO of FTX Debtors, said its January schedule was a testament to the success of its turnaround efforts. He added that creditors should prepare for timely payments. He said,
“We are well positioned to begin executing the distribution of recoveries to all customers and creditors. “We encourage customers to complete the necessary steps to begin receiving distributions in a timely manner.”
Those eligible for refunds must file tax forms and complete the credential. verification. Users will then join for compensation through BitGo or Kraken. Compensation will be in USD or stablecoins.
The update could mark the final phase of the bankruptcy process, which began two years ago following a liquidity crisis at FTX. Interestingly, the crisis exposed the financial irregularities of founder Sam Bankman-Fried (SBF) and senior executives.
SBF was sentenced to 25 years, while the other officials received shorter sentences for cooperating with the prosecution.
That said, $16 billion is expected to be disbursed to victims. Some experts, such as Simon Dedic of Moonrock Capital, suggested that capital will go to the markets.
“What do you think will happen to the alts when a bunch of degens suddenly get billions of dollars in the middle of a bull?”
The native FTX token, FTT, jumped 10% on Sunday following a surge market interest before payments. But at the time of writing, the altcoin had given back some of the weekend’s gains.
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